Demographics without dividend

India’s population has reached its demographic prime. Around 67.3per cent of our population is between 15 and 59 years of age, and this demographic advantage of a young working population will persist for at least another three decades. Approximately 26 per cent of the population is below 14 years, and just 7 per cent is above the age of 65, as against ~17 per cent in the US and ~21 per cent in Europe. By 2030, India’s working-age population is projected to reach its highest level at 68.9 per cent. The median age of the population will be 28.4 years, with a dependency ratio of only 31.2 per cent. In absolute numbers, India will have 1.04 billion working-age persons, constituting the largest workforce in the world.

But demographic strength does not lie in numbers alone. Large numbers can only translate into dividends through high productivity that drives wealth creation, not through the construction sector alone, but through high technology, innovative Information Technology, new-age services with high value addition, R&D-driven innovation, healthcare, and life sciences, to name a few.

Does our demographic dividend presently have the capacity to achieve this high productivity and wealth creation and take our GDP to the $7 trillion mark by 2030? This capacity can only develop with the right education and skills, which require cognitive power (brain cells) and physical health. Both start developing at the foetal stage and continue developing through childhood and adolescence into adulthood, with proper health, nutritional and educational care. Only then can the demographic dividend have the capacity for higher learning, superior skills and qualifications to fit contemporary job requirements.

NFHS 5 (2019-2021) informs that among our present demographic dividend (15-49 years), only 41 per cent of women and 50.2 per cent of men have 10 years or more of schooling; 57% of women and 25% of men are anaemic; and 18.7 per cent women and 16.2% men have Body Mass Index (BMI) below normal. Not surprising, therefore, that despite several skilling programmes implemented in India, prospective employers are not able to find the right skilled workers, and unemployment rates of ‘educated’ youth remain high.

Our immediate demographic dividend, adolescent girls and boys, will constitute India’s workforce for the next three decades. Among them, only 34% of girls and 35.9% of boys of ages 15-24 have completed education of 12 years or more; 59% of girls and 31% of boys are anaemic, and only 54.9% of girls and 52.6% of boys have normal BMI. The Annual Status of Education Report (ASER) (Rural) 2023, reported that nationally, only 77% in the 17-18 years category could read class 2 textbooks, and 35% could do division. Learning trajectory over grades 5,6,7, and 8 was relatively flat, meaning that there was little difference in learning levels within these grades.

This is our demographic dividend for the next three decades. Not a very bright picture about our future demographic dividend either – our children, who will enter the workforce after a decade or two. As per NFHS 5, 35.5% of children aged below five years are stunted, 19.3% are wasted, 32.1% are underweight, and 67.1% of children between 6-59 months are anaemic (figures for the two poorest quintiles are almost 50% higher). Most shockingly, only 11.3% of children aged 6-23 months receive an adequate diet, improved from 9.6% as in NFHS 4 (2015-16). This is the foundation of our demographic dividend for the next three decades.

Unrealised potential

Medical science confirms that brains develop fastest before the age of five, and lay the physical, mental, and emotional foundations for future life. According to the Centre on the Developing Child, Harvard University, 90% of a child's brain development happens before the age of five. Optimal brain development, therefore, becomes the first casualty of the 88.7% of children under two years, who are not receiving minimal, adequate diet. India’s routine dietary deficit, across age groups among at least 40% of our population, is well documented in our national surveys. Not surprising, therefore, that the resultant under-nutrition, poor health, and morbidity prevent children and adolescents from achieving their complete cognitive and physical potential and therefore, prevent them from acquiring the education and skills required for the emerging higher-end job market.

Our demographic dividend is deeply divided – on the one hand, we have highly qualified professionals heading some of the mightiest multi-national and national corporations in cutting-edge domains but we also have in our backyards the two poorest quintiles of our immediate and future human capital, unable to achieve their potential and doomed to remain at a subsistence level.

India will start ageing with each passing year after 2030, with the workforce numbers decreasing and the aged population increasing. A skill-less, asset-less, ageing population in poor health can become India’s greatest future burden. Let us not be complacent that high consumption by a large population will strengthen our economy. It is more probable that a large population with low education and skills will increase unemployment, and have little disposable income for high consumption. And let us not bank on the fact that there will be a flight of human capital from weaker sections to foreign lands where secondary labour is becoming scarcer, or that they will be contracted as mercenaries in foreign armies.

The time to act is now – for a serious real-time situation analysis of our immediate and future demographic dividend and to redesign our policy framework to strengthen our human capital through the life cycle. We must promote higher participation of women in the workforce and enable our demographic dividend to capitalise emerging economic and employment opportunities, through ensuring a sound foundation of better nutrition, health and education. After all, today’s children and adolescents constitute our immediate and future demographic dividend, and the GDP derived from them is completely commensurate with their health, education, skills and productivity.

(The writer is a retired IAS officer and Secretary to the Government of India – Development of the North Eastern Region)